Compiled 06/18/12 6:00 AM (CT) Statistics: London Gold Fix $1,623.50 +$1.25 LME Copper Stocks 249,125 tons -325 tons GOLD MARKET FUNDAMENTALS: (6:00 AM CST) The gold market saw a noted range down washout overnight, but the market was able to reject a moderate portion of that slide in prices. In fact, world equity markets initially seemingly shifting back toward a risk on posture, but weakening European equity market action and rising Spanish CDS rates seems to have kept the cloud of anxiety hanging over most markets. With adverse currency market action to start today, about the only positive outside market development for gold prices this morning is the minimal early gains being seen in platinum and copper prices in the Monday US trade action. It seems that the markets need some type of definitive action from the G20, a fresh debt plan from the EU and perhaps even signs that the US economy is capable of holding together for gold to resume the strength that was seen over the prior 6 trading sessions. While the NAHB will release its housing index results today, the markets might be hemmed in ahead of the coming two day FOMC meeting, which won't have results until early Wednesday afternoon. While the most recent COT positioning reports showed a slight build in spec long positioning of gold, the COT report probably understates the current length of the spec long, as gold prices this morning are sitting roughly $12 an ounce above the level where the COT report was compiled. The Commitments of Traders Futures and Options report as of June 12th for Gold showed Non-Commercial traders were net long 132,922 contracts, an increase of 3,499 contracts. The Commercial traders were net short 161,182 contracts, an increase of 2,815 contracts. The Non-reportable traders were net long 28,259 contracts, a decrease of 686 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 161,181 contracts. This represents an increase of 2,813 contracts in the net long position held by these traders. Comex Gold Stocks were 11.060 million ounces down 16,060 ounces. OUTSIDE MARKET DEVELOPMENTS: (6:00 AM CST) Chinese stocks were stronger overnight, as the markets were at least initially cheered by news of a pro-bailout party victory in Greece. European equities were also positive with the DAX and CAC 40 Higher but the IBEX was lower and at least a portion of the early moderate gains in the European markets were being pared. Early US equity market action was weaker as the trend of the overnight action was seemingly shifting back in favor of the risk-off crowd. Markets might have been discouraged by the lack of an Indian interest rate reduction overnight and they might also have been disappointed with Spanish yields reaching up to a Euro era high as that could keep many potential investors on the sidelines until the road forward is less bumpy. It is possible that an upcoming G20 meeting will serve to cushion the markets against the Euro zone debt contagion story, but in the mean time the markets are likely to be driven in both directions as the world waits to see if the Greeks can actually form a government with the newly elected factions.
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